When a couple divorces in Connecticut, the process of dividing marital property can become tricky. One of the hardest assets to agree on is the family home. While the most simple solution is to sell the property and split the equity, this may not be an option if one party wants to remain in the home. The spouse who is remaining in the home will want to have a free and clear claim to it moving forward, and the partner who moves out will want to ensure that his or her name is completely removed from this asset in the event that there are future losses or problems.
If the person who wishes to keep the home cannot get a mortgage in his or her own name, then it opens up the other partner for liability issues if the payments are not made on time. It also makes it more difficult for the other partner to buy another home because of the existing mortgage on the credit report. While the courts may award the home to one person or the other, those arrangements are not recognized by the finance company. Everyone listed on the mortgage can be held liable for missed payments, late fees and other expenses. If the person who wishes to keep the home is unable to obtain a mortgage either on their own or with a co-signer, then professionals recommend having the home sold and the equity split.
Another issue at play may be the money that has been invested in the home over the years. If one party supplied a substantial part of the down payment, then that individual may want those funds returned if they are not remaining in the home. When the remaining partner refinances the home, they can finance a larger amount in order to return the contributed amount to their ex-spouse.
When one person wants to remain in the family home, an attorney could review the proposal for the division of property. In the case of funds that have been invested in the home, an attorney can work through the courts to request that those funds are returned out of any sale proceeds prior to the equity split or that they’re financed into the mortgage and returned to the individual.
Source: Credit.com, “How to Divide Your House in a Divorce“, Scott Sheldon, December 01, 2014